Equality and the Case against
Per Capita Permits
We have noted that many people believe that the problem of climate change should be handled by an international cap-and-trade system. Under this approach, participating nations, and perhaps the entire world, would create a “cap” on greenhouse gas emissions. Nations would be allocated specified emissions rights, which could be traded in return for cash. Though most economists favor a carbon tax, a system of this kind would probably be adequate and appears to be more politically feasible.
By itself, however, the proposal for a cap-and-trade system does not answer a crucial question: How should emissions rights be allocated? It is tempting to suggest that the status quo, across nations, provides the appropriate baseline. On one view, emissions should be frozen at existing levels, so that every nation has the right to its current level of emissions. On a more aggressive view, generally captured in the Kyoto Protocol, all or most signatory nations should have to reduce their emissions levels by a specified percentage, again taking the status quo as the foundation for reductions. The status quo might seem to have intuitive appeal, but it is also somewhat arbitrary and raises serious questions from the standpoint of equity. Why should climate change policy take existing national emissions, and to that extent existing national energy uses, as a given for policy purposes? Should a nation with 300 million people be given the same emissions rights as a nation with one billion people, or 40 million people, simply because the emissions of the three nations, at the current time, are roughly equal?